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Directors' Report

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Directors' Report Annual Consolidated Financial Report 2011 Lend Lease Group Directors’ Report Table of Contents 1. Governance 1 a. Board/Directors 1 b. Company Secretaries’ Qualifications and Experience 3 c. Officers Who Were Previously Partners of the Audit Firm 3 d. Directors’ Meetings 4 e. Interest in Capital 5 2. Operations 5 a. Principal Activities 5 b. Review and Results of Operations 5 c. Distributions 5 d. Significant Changes in State of Affairs 6 e. Events Subsequent to Balance Date 6 f. Likely Developments 6 g. Environmental Regulation 6 3. Remuneration Report 7 a. Snapshot of Changes 9 b. Actual Executive Remuneration Outcomes – Audited 11 c. About this Report – Audited 12 d. Our Governance Policy 13 e. Reward Strategy and Practice – Audited 13 f. How Rewards are Influenced by Performance – Audited 21 g. Executive Contracts – Audited 24 h. Statutory Executive Remuneration Disclosures – Audited 26 i. Non-Executive Director Remuneration – Audited 33 4. Other 35 a. Security Options 35 b. Indemnification and Insurance of Directors and Officers 35 c. Non Audit Services 35 d. Rounding Off 36 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 37 Annual Consolidated Financial Report 2011 Lend Lease Group Directors’ Report The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being Lend Lease Corporation Limited (‘the Company’) and its controlled entities including Lend Lease Trust (‘LLT’) (together referred to as the ‘Consolidated Entity’ or the ‘Group’), for the financial year ended 30 June 2011 and the Auditors’ Report thereon. Following shareholder approval on 12 November 2009, the shares of the Company and the units in LLT were combined as stapled securities. From 13 November 2009, the shares in the Company and the units in LLT have been traded as one security under the name of Lend Lease Group on the Australian Securities Exchange (‘ASX’). 1. Governance a. Board/Directors The names, qualifications and experience of each person holding the position of Director of the Company at the date of this Report are: D A Crawford AO, Chairman (Independent Non Executive Director) Age 67 Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003. Mr Crawford was appointed an Officer of the Order of Australia (AO) in June 2009 in recognition for service in various fields including to business as a Director of public companies, to sport particularly through the review and restructure of national sporting bodies, and to the community through contributions to arts and educational organisations. Experience and Qualifications Previously, Mr Crawford was National Chairman of the Australian firm of KPMG. He has extensive accounting and business experience having worked with many large corporations and governments. He holds a Bachelor of Commerce and Bachelor of Laws from the University of Melbourne. He is a Fellow of the Institute of Chartered Accountants. Other Directorships and Positions Mr Crawford is Non Executive Chairman of Foster’s Group Limited (appointed Director August 2001 and Chairman October 2007) and a Non Executive Director of BHP Billiton Limited (appointed May 1994). He was formerly a Non Executive Director of Westpac Banking Corporation (appointed May 2002, resigned December 2007) and National Foods Limited (appointed November 2001, resigned June 2005). S B McCann, Group Chief Executive Officer and Managing Director (Executive Director) Age 46 Mr McCann was appointed Group Chief Executive Officer and Managing Director in December 2008 and joined the Board in March 2009. Experience and Qualifications Mr McCann joined Lend Lease in 2005. Prior to his current role, Mr McCann was Group Finance Director, appointed in March 2007 and Chief Executive Officer for Lend Lease’s Investment Management business from September 2005 to December 2007. Mr McCann has more than 15 years experience in funds management and capital markets transactions. Prior to joining Lend Lease, Mr McCann spent six years at ABN AMRO, where his roles included Head of Property, Head of Industrial Mergers & Acquisitions and for the last three years, Head of Equity Capital Markets for Australia and New Zealand. Previous roles also include Head of Property at Bankers’ Trust, four years as a mergers and acquisitions lawyer at Freehills, Melbourne and four years in taxation accounting. Mr McCann holds a Bachelor of Economics (Finance major) and a Bachelor of Laws from Monash University in Melbourne, Australia. Other Directorships and Positions Nil. 1 Annual Consolidated Financial Report 2011 Lend Lease Group Directors’ Report continued 1. Governance continued a. Board/Directors continued P M Colebatch (Independent Non Executive Director) Age 66 Mr Colebatch joined the Board in December 2005 and is Chairman of the Personnel and Organisation Committee and a member of the Risk Management and Audit Committee. Experience and Qualifications Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the Executive Board of Swiss Reinsurance Company, Zurich. He was previously on the Executive Board of Credit Suisse Group, Zurich, where he was Chief Financial Officer, and was subsequently Chief Executive Officer of Credit Suisse Asset Management. Other Directorships and Positions Mr Colebatch is a Non Executive Director of Insurance Australia Group Limited (appointed January 2007), a Non Executive Director of Man Group plc (appointed September 2007) and is on the Board of Trustees for the Prince of Liechtenstein Foundation and the LGT Group Foundation (appointed September 2009). G G Edington CBE (Independent Non Executive Director) Age 65 Mr Edington joined the Board in 1999 and is a member of the Risk Management and Audit Committee and the Sustainability Committee. Experience and Qualifications Qualified as a Chartered Surveyor, Mr Edington brings to the Board extensive UK and international experience in the property sector. Mr Edington was a Director of BAA plc and Chairman of BAA International. He joined BAA plc in 1988, became a member of the Board in 1991 and has been the Chairman of six BAA companies. He is a past President of the British Property Federation, was the Chairman of UK property company Greycoat Estates Limited and was a member of the Bank of England Property Forum. Mr Edington was formerly Chairman of the Council of Trustees of the UK children’s charity, Action for Children, and was awarded a CBE for services to children. Other Directorships and Positions Mr Edington is on the Board of Trustees for the Fulham Palace Trust, based in the UK (appointed May 2011). P C Goldmark (Independent Non Executive Director) Age 70 Mr Goldmark joined the Board in 1999 and is Chairman of the Nomination Committee and a member of the Sustainability Committee. Experience and Qualifications Until his retirement in December 2010, Mr Goldmark was Director, Climate and Air Program at Environmental Defense, a US based non-profit environmental advocacy organisation. He was the Chairman and Chief Executive Officer of The International Herald Tribune in Paris between 1998 and 2003. Prior to this, he was the President and Chief Executive Officer of the Rockefeller Foundation in New York for 10 years. Mr Goldmark has held positions including Senior Vice President of the Times-Mirror Corporation, Executive Director of the Port Authority of New York and New Jersey, and Director of the Budget for the State of New York. He now works as an independent consultant and columnist and is a writer and speaker on world affairs. Mr Goldmark graduated with a BA from Harvard College, Government Department, magna cum laude. He brings to Lend Lease his wide experience as a Chief Executive Officer and senior executive in the private and public sectors, both in the USA and internationally. Other Directorships and Positions Mr Goldmark is on the Board of Solar Outdoor Lighting in the US (appointed January 2011). 2 Annual Consolidated Financial Report 2011 Lend Lease Group Directors’ Report continued 1. Governance continued a. Board/Directors continued J A Hill (Independent Non Executive Director) Age 65 Ms Hill joined the Board in May 2006. She is Chairperson of the Sustainability Committee and a member of the Personnel and Organisation Committee. Experience and Qualifications Ms Hill has held a number of senior executive positions in the land development and housing construction industry in North America. She was formerly the Chairperson, President and Chief Executive Officer of Costain Homes, Inc. (US) and Vice President and General Manager, Mobil Land (Georgia) Corporation. She has a Bachelor of Arts from the University of California in Los Angeles and a Master of Arts in marketing and management from the University of Georgia. Other Directorships and Positions Ms Hill is a Non Executive Director of Wellpoint, Inc. (appointed March 1994). She was formerly a Non Executive Director of Resources Connection, Inc. (appointed January 2003, resigned December 2006) and Holcim (US) Inc (appointed February 2004, resigned January 2007). Ms Hill also sits on the Board of Directors of the Lord Abbett family of mutual funds, which is the trustee of 31 mutual funds of publicly held companies. D J Ryan AO (Independent Non Executive Director) Age 59 Mr Ryan joined the Board in December 2004. He is Chairman of the Risk Management and Audit Committee and a member of the Personnel and Organisation Committee. Experience and Qualifications Mr Ryan has a background in commercial banking, investment banking and operational business management. He has previously held senior executive management positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies. He has a Bachelor of Business from the University of Technology in Sydney, Australia, and is a Fellow of the Australian Institute of Company Directors and CPA Australia.
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